20 FAQs about equal pay
- We are recruiting a woman to do the job of a man who is retiring. Do we have to pay her what he was getting?
- If we have no one doing a job similar to that of a female employee, do we need to worry about her making a claim under the Equality Act?
- What is a comparator?
- How does anyone decide whether work should be rated as equivalent?
- How does anyone decide whether work is 'of equal value'?
- We have women and men doing the same job, but the women mostly work part time. Surely that justifies different pay scales?
- We have women and men doing similar jobs, but the men have to do some heavy lifting. Can we use that to justify different pay scales?
- We have women and men doing similar work, but the men usually work the night shift and get paid for anti-social hours. Is this OK?
- We pay men a productivity bonus, but women are not involved in production jobs. Surely this is OK?
- Do we have to include benefits when we compare pay for our employees?
- Our basic pay is the same for men and women, but men get more overtime. On the other hand, women get maternity pay. Can we argue that they win as much as they lose?
- We give extra holiday to people who have been with us five years, but women always leave by then. Is this OK?
- A female employee claims her pay should be equal to that of a man who works at a completely different site. Can she do that?
- A woman who only joined us three weeks ago is claiming that she should be paid the same as a man doing the job. Can she do this?
- A man who left eight months ago has filed an equal pay claim. Can he?
- We have been served notice of a claim which has no hope of succeeding. What can we do to stop it?
- We have been asked to provide details of the pay and benefits of a male 'comparator'. Surely we do not have to do this?
- If there is a finding against us under the Equality Act, how far back will the award go?
- Is there a limit on awards under an equal pay scheme?
- Would we have to pay interest on back pay?
1. We are recruiting a woman to do the job of a man who is retiring. Do we have to pay her what he was getting?
No, but if you pay her less, you need to be able to justify the difference. It is up to you to prove that she is getting less for reasons other than her sex, rather than up to her to prove that her sex is the reason. If you cannot prove that there are other, adequate, reasons for the difference, you will be judged to be in breach of the Equality Act.
You will have to establish that the difference in pay is genuinely due to a 'material difference' other than sex. Such a material difference might include, for instance, the fact that her predecessor has much more experience, or higher qualifications, than she has. It would not be acceptable to pay her less because, as a woman, she was prepared to accept less pay, or because women in general are prepared to accept less pay.
In most cases an employee who wants to make an equal pay claim must compare herself (or himself) against another employee who is working for you - a 'comparator' (see 3). However, when the comparison is with a predecessor, it does not matter if the predecessor has now left your employment. Employees (and ex-employees) cannot generally make a claim based on using a successor as a comparator (see 3).
New regulations on gender pay gap reporting came into force in 2017. If you have fewer than 250 employees, you do not have to report but may want to consider reviewing your pay structures to ensure you are not unfairly discriminating against any groups of employees.
2. If we have no one doing a job similar to that of a female employee, do we need to worry about her making a claim under the Equality Act?
Yes. She does not have to restrict her comparisons to people doing work that is the same. It could be rated as equivalent under a job evaluation scheme. Or it could be work which is different in nature, but demonstrated to be ‘of equal value’ - possibly by using an independent expert to assess the value of both jobs. ‘Equal value’ claims have succeeded where cooks compared themselves to carpenters, and speech therapists to clinical psychologists.
Following the introduction of the Equality Act in October 2010, a claim of direct pay discrimination can be made, even if no real person comparator can be found. So if your employee can show evidence that she would receive better remuneration if she were male and doing equal work, she may have a claim - even if there is no-one of the opposite sex doing equal work in your organisation.
3. What is a comparator?
When someone puts in a claim for equal pay, they are claiming for pay which is equal to that of someone else. The person with whom the comparison is made is the comparator. An employee can claim for equal pay with one or several comparators, and on different grounds - for example, she (or he) might compare earnings with one because they do similar work, and another because their work is of equal value.
An Employment Appeal Tribunal has ruled that these claims do not have to be made simultaneously - the fact that someone is using one comparator now does not debar them from using another in the future. It is therefore essential to keep good records, not only of what people are (and were) paid, including the value of their benefits, but also of why.
You no longer need to worry about equal pay claims from employees (or, more usually, ex-employees) who base their claim on comparators who were not employed by you in the relevant job until after the first employee stopped doing that job - usually a successor who takes over the employee’s job. This is because, in a case in 2008, the Employment Appeal Tribunal (overturning previous decisions) said that former employees may not compare the package they had been getting with that awarded to employees who were not employed in the relevant job until after they had stopped doing it, as the comparison was ‘too hypothetical’.
A comparator will not necessarily support the employee’s claim for equal pay, and may not even be aware of it. If the claimant does not already have the information they want on the comparator’s terms and conditions, they can obtain it through the Equal Pay Questionnaire (ET1), or by asking for documents through the Employment Tribunal (‘discovery’). The Tribunal may, for instance, require you to allow the claimant and her (or his) lawyer access to your premises, to interview the comparator. Whether the claimant wins or not will have no effect on the comparator’s pay and benefits.
If you have 250 employees or more, you are now required to comply with gender pay gap reporting regulations. Find guidance on gender pay gap reporting on the Acas website.
4. How does anyone decide whether work should be rated as equivalent?
There may be a job evaluation scheme in place, or an employer may carry out an equal pay review, of the kind that awards points for the various requirements of each job - so much for mental concentration, so much for physical effort, and so on. Such schemes are virtually unknown, outside the top 1,000 companies, some big charities, the civil service and publicly-funded enterprises. But employees may still make a claim for doing work that is 'similar', or 'of equal value'.
The Employment Tribunal must rely on the findings of a job evaluation scheme, if there is one, unless there are 'reasonable grounds' for believing that it is biased or otherwise unreliable. For example, a scheme that gave an inappropriate weighting (too low) to an element that was an important part of a woman's job (such as caring, in an old people's home), or an inappropriate weighting (too high) to an element that was an important part of a man's job (such as physical strength, in the case of a gardener), might well be judged to be discriminatory, and therefore inadequate as a defence against an equal pay claim.
5. How does anyone decide whether work is 'of equal value'.
With difficulty, unless there is a job evaluation scheme in place (see 4). The Employment Tribunal will have to assess the demands made on the jobholders, and the skills they need to do their jobs, to determine - as objectively as possible - whether the jobs are of equal value.
The Tribunal sometimes appoints an independent expert to undertake this assessment, and if you are defending against such a claim and want to argue that the jobs are not of equal value, you could appoint an expert of your own, though the experts are likely to be required to come up with a joint statement of the matters on which they agree, and those on which they disagree. You could also argue that whether or not the jobs are of equal value, the difference in pay is due to another, 'material' factor, which is not the difference of sex.
6. We have women and men doing the same job, but the women mostly work part time. Surely that justifies different pay scales?
No. You are obliged to treat part-timers 'no less favourably' than those who are employed on a full-time basis. That means that if they are doing the same job they must be paid at the same rate and/or receive equivalent remuneration and benefits.
7. We have women and men doing similar jobs, but the men have to do some heavy lifting. Can we use that to justify different pay scales?
Possibly, but it would mean having to rely on the "material difference" defence if a claim is made under the Equality Act, and that can be difficult. It would principally depend on whether heavy lifting was actually (as opposed to theoretically) necessary to getting the job done, and whether extra payments were required to get people who could do it.
If you are making higher payments to people who could (but in fact don't) do heavy lifting, and who are wholly or mostly male, you are potentially vulnerable to claims under the Equality Act. And even if you can justify what you are doing under the Equality Act, you might - depending on your recruitment practices - be vulnerable to charges of discrimination under the Act. Take legal advice.
8. We have women and men doing similar work, but the men work the night shift and get paid for anti-social hours. Is this OK?
Yes, provided women are offered an equal opportunity to work the night shift and suitable procedures are in place to ensure women working night shifts feel safe and secure and therefore are confident to do so.
9. We pay men a productivity bonus, but women are not involved in production jobs. Surely this is OK?
This would depend on the reason why women are not involved in production jobs. If they are prevented from taking them by health and safety legislation, that would be acceptable; otherwise you will have to be able to demonstrate that the jobs are open to them (or if not, that there is some material reason why not), or you may be guilty of indirectly discriminating against women.
You will also need to consider whether your production workers might be used as 'comparators' (see 3) in a claim for work of equal value. If the Tribunal accepts that a woman's work is of equal value (see 5), you will have to make equal payments unless you can objectively justify the pay differential. Where there is a significant difference in the proportion of men and women in the higher paid group, it would not be enough to prove that the difference in pay rates is down to a genuine material factor (for instance, that production workers sometimes have to work nights). You would have to prove that the factor (or factors) was genuine, significant, relevant and objectively justified.
However, in a case in 2007, two female police officers who were unable to do night work because of childcare responsibilities claimed they were doing 'like work' to a male comparator who was receiving special payments because he was doing night work. The Court of Appeal ruled that, statistically, the scheme adversely affected women because fewer women were able to work nights than men. The employer therefore had to be able to justify the payments as a proportionate means of achieving a legitimate aim. In a boost for employers, the Court decided that rewarding night work was a legitimate aim, and that the particular scheme was a proportionate means of achieving it.
The case shows that employers are not necessarily obliged to pay female workers on the basis of work they would have been able to do (but do not in fact do) if it were not for their childcare responsibilities. However, the sums involved were relatively small, and the employer may have found it harder to justify larger payments, so the result is not always cut and dried.
The standard of proof is high so, before considering this course, you should take legal advice.
10. Do we have to include benefits when we compare pay for our employees?
Yes. All contractual benefits are covered under the Equality Act, including:
- non-discretionary bonuses
- overtime rates and allowances
- performance-related bonuses
- sick pay
- access to the pension scheme
- severance and redundancy pay
Non-contractual benefits such as discretionary bonuses, training and promotion are also covered under the Act.
11. Our basic pay is the same for men and women, but men get more overtime. On the other hand, women get maternity pay. Can we argue that they win as much as they lose?
No. Anyone making a claim under the Equality Act is entitled to compare any term in her (or his) contract with the equivalent in the comparator's (see 3), and if the claim succeeds, to have the less favourable term improved to the level of the more favourable one. Not all women will become pregnant and the different benefits cannot be traded in any event.
12. We give extra holiday to people who have been with us five years, but women always leave by then. Is this OK?
Possibly, if you can prove specific justification of the practice (see 9). However, the European Court of Justice has ruled (in an equal pay claim involving a benefits scheme that favoured those with longer service) that in some circumstances employees may reasonably claim that there are ‘serious doubts’ about the benefits brought to their employers by longer service.
Even where longer service does bring benefits, an employee can also raise ‘serious doubts’ about the period of service required - for example, an employee may be able to argue, in a scheme where ten years’ service is rewarded better than seven years’ service, that, in relation to that particular job, the benefits of experience ‘plateau’ after seven years, so there is ‘serious doubt’ whether the performance of an employee with ten years’ service is better than that of an employee with seven years’ service.
Where such doubts are justifiable, the employer who uses longer service to justify better pay for one sex than the other, may be required to prove specific justification (see 9). The mere fact that one sex generally works longer than the other would not be enough.
You might, in any case, also fall foul of legislation on age discrimination. Service requirements of up to five years are exempted, but you might have to demonstrate that the practice satisfies a business need if you intend to require service in excess of five years to obtain better benefits.
13. A female employee claims her pay should be equal to that of a man who works at a completely different site. Can she do that?
She can probably do it, provided that:
- both she and her comparator (see 3) are working for the same employer, or associate employers (or, if the case is being brought under EU law, in the same establishment or service)
- common terms and conditions apply
You may, however, be able to show that the difference in pay is due to a genuine material factor unrelated to sex - such as, for instance, the fact that one employee qualifies for a London weighting, while the other does not.
14. A woman who only joined us three weeks ago is claiming that she should be paid the same as a man doing the job. Can she do this?
There is no minimum service requirement for making claims under the Equality Act. Her chances of success will depend upon the extent to which the jobs are similar - does his, for instance, include any extra responsibilities, or require any extra experience - and what, if any, are the material differences that justify you in paying him a higher rate. Take legal advice.
15. A man who left eight months ago has filed an equal pay claim. Can he?
This is possible, but only in very limited circumstances: for example, if there is 'deliberate concealment' of relevant facts by the employer. Equal pay claims generally have to be filed within six months of leaving the job. Failure to do so would normally lead to the loss of any claim as Employment Tribunals are strict on deadline compliance. Do not assume that the case will be dismissed, however, and you should respond to the claim within the usual three week deadline. Take legal advice.
16. We have been served notice of a claim which has no hope of succeeding. What can we do to stop it?
You can apply to the Employment Tribunal for a pre-hearing review, at which the claim may be struck out if the Tribunal decides that it has no reasonable prospect of succeeding. If this happens, you can apply for an order that your legal costs be paid by the employee. Take legal advice.
17. We have been asked to provide details of the pay and benefits of a male 'comparator'. Surely we do not have to do this?
You must respond to any claimant's request for information on a comparator's pay and benefits within eight weeks: if you fail to do so, the Tribunal can order disclosure, or failing that, draw adverse conclusions. In responding, however, you need to balance the claimant's right to enough information to pursue her claim, with the comparator's right to privacy, under both the General Data Protection Regulations and the implied duty of trust and confidence owed by an employer to an employee. This is a complex area, and you will need expert legal guidance.
If you have 250 employees or more, you are now required to comply with gender pay gap reporting regulations. Find guidance on gender pay gap reporting on the Acas website.
18. If there is a finding against us under the Equality Act, how far back will the award go?
Up to six years (five in Scotland) - except for pensions, which can be taken back to 6 April 1976.
19. Is there a limit on awards under an equal pay scheme?
20. Would we have to pay interest on back pay?
Yes. Interest on back pay can be a substantial part of the award.